Here you will find information about talks, advice and articles with one goal:
Develop confident art collectors.

Article published as part of the debate organized by Charlotte Burns on the Cisneros Collection platform.

On 9 December 2015, the Brazilian newspaper “Folha de São Paulo” reproduced a report by the Federal Police which detailed deviations in public funds amounting to a total of R$39,5 billion (which is around US$10 billion). This is part of a crisis that goes beyond political, economic, or social aspects, something that leading local journalists and commentators are calling a ‘moral crisis’.

The impacts of the crisis are resonating throughout different social classes and segments. But there are signs that culture is playing its part in bringing about positive change, and that the behavior of art world professionals and enthusiasts is starting to adapt.

For example, local collectors seem more interested in supporting activist or socially engaged art than in searching for art investment deals—as was the case in the recent past. The PARTE art fair last November (2015) promoted a roundtable discussion about pixo, a radical art form present in the streets of São Paulo that has historically called for a wide-scale reassessment of social values. This once neglected social movement was represented for the first time in an art fair and warmly welcomed by the avid participation of a large public. The event helped strengthen understanding of the values of a different, socially-minded group.

Meanwhile, artists and other creative people are beginning to express their indignity at the situation in Brazil, and to collaborate however they can. A group of professionals and donors, including myself, got together last October, 2015, to launch a project aimed at facilitating political art responses to the abuses of the government through an activist art award scheduled to be launched in February.

One of the organizations behind the massive demonstrations that brought up to a million people to the streets in March 2015 realized that culture could amplify the impact of their message and help the population express its frustration in innovative ways. So they staged a talk about art activism at their national conference in November. The event was well-received and inspired actions and further collaboration between the art specialist and the politically active group.

In times of crisis, culture has a specific value. Indeed, if the heads of both chambers of congress along with one of the country’s leading bankers can commit crimes of major consequence but remain free and continue to exercise power, the message given to the population is one of inverted moral values. The confusion is such that even strategizing a response is difficult—how can a parliament fragmented into 35 political parties coordinate a response?

The answer may be in looking for a common denominator, capable of connecting across the different spheres, to help reinstate moral values and judgment. The British playwright Tom Stoppard once said, in reference to the challenges his country faced after the 2008 credit crisis, that art “provides the moral matrix from which we draw our values.” Similarly, the Polish sociologist Zygmunt Bauman says that culture was initially conceived as “a navigation tool to guide social evolution towards a universal human condition.” Today, could culture be the antidote to Brazil’s moral crisis, providing the basis through which the country could work towards moral enlightenment? If so, then the recent economic turmoil leaves the cultural sphere with a strong sense of responsibility and a lot of work to do.

As much as economics has its role in the art world, the market is not at the heart of art. Deep contradictions and frustrations are some of the real fuels of creativity, and there is plenty of both in Brazil today. A new generation has a good opportunity to arise, and maintain the country’s cultural momentum as a way of strengthening the muscle required to lever historical change—as it has done in the past.

Relationships built on trust are crucial, but for the art market to grow, verifiable information about price and provenance is essential

The web can allow market transparency to complement deals made with a handshake. Photo: rain rabbit

The art world is riddled with tensions: between the rational and the emotional, commerce and culture, public and private, collectors and investors, amateurs and connoisseurs—and between trust and transparency in the art market. A group of leading academics and practitioners debated what this means for the art world at a conference in Goodenough College, London, sponsored by Skate’s Art Market Research and Sotheby’s Institute of Art, coinciding with a research project launched at the institute.

Trust and transparency are often assumed to be substitutes—one replaces and becomes superfluous when there is evidence of the other. But in the increasingly global and technologically determined marketplace, trust and transparency can, and should be, complementary.

Art-world participants are particularly adept of navigating the choppy waters of competing interests. Like the Roman god Janus, dealers and auction houses often face in two directions at once. Contemporary galleries, for example, promote and position their artists in a cultural discourse while meeting the commercial realities of a business. Auction houses broker deals between consignors and buyers with directly competing interests who want the best price for works.

What makes the art world special is that at the top end it is a truly global marketplace of rare and high-value objects, inhabited by a few big players whose whims can move the market. Even at the middle and lower ends, to survive the uncertainty of a market built on the fickleness of taste, successful businesses rely on something vaguely termed “trust”.

There is widespread belief that trust, in all its forms, is at the heart of the art world. Individuals rely on trust-based relationships for transactions where handshake deals are the norm. A purchase at major international art fairs is sealed not with a written and signed contract but with an understanding. International institutions such as Sotheby’s and Christie’s build their brands on the strength of the reputations of their experts and the personal relationships they forge with long-standing clients.

Trust can broadly be understood as the expectation that an exchange partner will not behave opportunistically—they will not take advantage of you even if it could benefit them.

At the heart of trust is the willingness to accept vulnerability within a relationship. By definition, if you trust someone, you do not check up on them. But if you don’t check, you will never know for sure. “Trust, but verify”, the old Russia proverb, was the title of the conference keynote address by Orley Ashenfelter, a professor of economics at Princeton.

For those in the art world, trust-based relationships have many benefits. They can reduce the costs of transacting and encourage exchange. At international art fairs, deals are done on a handshake and it is common practice for dealers to lend valuable objects to try out at home before you buy. Dealers assume the work will be returned properly and in due course.

But trust has a dark side. What makes cases like the recent closure of Knoedler & Company, following alleged fraud and the alleged selling of fakes, so detrimental is that they illustrate that no one is above suspicion in a system based on trust.

Historically, the trust-based art world has also been characterised by a lack of transparency. It is often described as the last unregulated market in the world. On the one hand, the private nature of transactions and a focus on client confidentiality and discretion are at the heart of a highly personalised service. On the other, opacity and a lack of verifiable information, particularly in terms of price and provenance, make it difficult to make good decisions and monitor risk.

Although consumers and emerging companies are increasingly calling for more transparency in some aspects of the market—for example, the asking price, size of commissions and number of agents—practice is far from uniform. When prices are not openly quoted, dealers can and do discriminate between clients, based on characteristics such as their age, nationality and visibility in the market.

Asymmetry of information naturally suits the person who knows more. This might suggest a need for regulation to ensure market transparency. But regulation should not be confused with transparency and is difficult to achieve in a global marketplace of many different cultures. Functional market transparency is based on accepted norms of behaviour that are willingly subscribed to by all participants, not imposed from above.

So how can trust and transparency be reconciled today? Communications technology is the answer. More information than ever is available about the art market from a growing range of sources. These include auction price databases such as ArtPrice, Artnet and Invaluable, and bespoke indexes such as Mei Moses and Art Market Research, as well as news and analysis from companies like ArtTactic and industry players such as Aris Title Insurance, Artemundi Global Fund and Skate’s Art Market Research.

But more data does not necessarily mean more knowledge. Experts with skills based on years of experience, training and intuition are still critical for making data make sense.

The proliferation of price indices is an example. These can be a good indication of market trends but the data and methodology used to construct indices is key. They are often neither entirely transparent nor systematic, leave out swathes of unreported transactions, while calculation methods are fiercely debated by both practitioners and academics.

A few organisations have harnessed technology to benefit from the information revolution. Founded in 1971, the Antiques Trade Gazettetransformed the trade by providing a centralised source for future auctions. Prior to that, dealers had to subscribe to slow postal cuttings services for information about local events. While some dealers grumbled this ruined hard-won opportunities, the auction world suddenly opened up to a wider audience.

The next radical steps were to go online as early as 1990 and then in 2006 to establish a live bidding portal for auctioneers, the-saleroom.com. This provided a centralised platform where buyers could access information, watch, listen and take part in smaller and regional auctions in real time. Hosting 116 sales in the first year, which generated £956,000, in 2012 the-saleroom.com hosted 2,415 sales with £52.6m in online revenue. Some sales attracted more than 1,000 bidders, a global audience only accessible through the web.

Dreweatts & Bloomsbury Auctions is another company that has benefited from such online opportunities. It uses three live bidding engines (liveauctioneers, artfact and the-saleroom.com) enabling its parent company, Noble Group, to sell £10m worth of work online in 2012. Using the-saleroom.com alone, the growth of the business has been staggering, from £286,558 in 2006 to £3.9m in 2012.

So, do we have to choose between trust and transparency? For the market it looks like technology allows the trade-off to blur. When carefully balanced, both trust and transparency can support existing players, provide opportunities for new ones, and ultimately benefit those who love art.

• The writer is associate professor in art business at Sotheby’s Institute of Art, London, and the academic director of the International Art Industry Forum on Trust and Transparency in 2013

Correction: This article was updated on 1 August to correct the name of the Artemundi Global Fund.

The concept of this site is i joao com(unicate)

1. Time is merciless. Consequences tend to be forgotten as only causes have a place in history. In art this means that only 6/7 artists in each generation tend to be remembered.

2. There are 210 000 artists on records, the biggest artistic output ever, yet critics are more ignored than ever. Our generation may be the least discerning so far.

3. Critic is often thought to be politically incorrect. Performance, graffiti and video, once mediums of protest, are now desired commodities.

4. Experts claim art investments return up to 260% per month while evidences show that even 9% per year is hardly achievable.

5. Museums plan their exhibitions to meet audience targets. Career planning among artists and art professionals are as strategic as those in the corporate world. Yet, all hold discourses on the purety of art.

6. Fire the debate about these and other paradoxes in the art market is the objetive of this website.

7. Your contribution is urgent.

Introduction

Passionate about both art and entrepreneurship, the art dealer João Correia founded two companies: Collezionista, an art advisory firm based in São Paulo, and, I Know What I Like, a contemporary art debate society based in London. He also writes regularly to the media and to this personal blog in English and Portuguese languages.

Testimonials

João,

I learned a lot from your analysis and systematization. I really liked the Kunstkompass event. I will be in the next one, count on me.

Mauro CavallettiJWT São Paulo

We feel Joao Correia is our man in Sao Paulo. His opinions and expertise means a lot for us and beyond his articles we believe he could be the right editor in a future project: Art Democracy Brazil.

Guillermo Gonzalez TaboadaArt Democracy Magazine

Hey Joao!

You are really doing some AMAZING work. Congratulations!!

Joao Unzer

João,

I really like the article. I am going to share it with some of our clients who are always discussing this subject!

Yannick

Yannick CarvalhoRaquel Arnaud Gallery

Dear João,

Your talk was very interesting ! Your work is very professional . Congratulations !

João Correia was invited to give a talk about art and its market to a group of graduate art students at the Centro Universitário Belas Artes de São Paulo. This complex theme was dealt with in a realistic manner, based in his signicant work exper…

Marilucia BottalloDiretora TécnicaInstituto de Arte Contemporânea

As a professional working in Publishing I am always after the most exciting content being generated in the London art scene. This is what led me to join I Know What I Like, a discussion group João founded in 2010. What I discovered was an intellectu…

Alenka OblakPhaidon Press

“João really understands art, not just its market, which is a rare combination.”

Melanie GerlisArt Market EditorThe Art Newspaper

Joao, throughout his career, has demonstrated superb taste married to perseverance in expanding the scope of his international contacts. I trust his judgment in unfamiliar areas of collecting.